Must-have #7 in the 7 Marketing Plan Must-Haves is the marketing budget. We’re finding, however, that many small business owners are reluctant to set a budget. As a result, they’re taking a haphazard approach to marketing their company, if they’re marketing at all. The result? Their sales reps often have to work harder and longer to close business.
Folks, it’s time to put your big boy/big girl pants on. If you want your company to stand out in a crowded marketplace, you must invest in your marketing and do so consistently over time. And did you know that investing in your company’s brand and thought leadership positioning (often called content marketing) can shorten your sales cycle and reduce selling costs? According to HubSpot, the average cost of a lead generated via content marketing techniques was 60% less ($134 vs. $332) than leads generated through other methods.
These investment guidelines can help you set a realistic marketing budget:
- According to the Small Business Administration, companies should be investing 7% of their annual revenues in marketing. So for a $1 million company, this means an investment of $70,000 per year.
- Marketing Sherpa’s survey says smaller companies (<100 employees) are allocating 11% of sales to their marketing budgets.
- B2B companies should allocate 11% of their revenues to marketing, according to the Chief Marketing Officers Council.
- Professional service firms typically can invest 5% of revenues each year in their marketing, based on the CMO Council’s research.
The bottom line: Use the guidelines above to set a marketing budget and stick to it! A wise marketing investment will pay off over time with better, more qualified leads and ultimately more business for your company.